Facebook facing regulator crackdown

Facebook is facing a difficult future as it tries to exploit user data to turn a profit - European regulators are considering sweeping reform of data regulations to prevent social networks from over-exploiting the private data of their users.

Changes would extend data protection rules to third party application developers which use social networking profile data to function. They would also extend European data protection rules to firms operating in Europe - not just those based in Europe.

Social networking sites increasingly rely on third party application developers, not just to make their sites more attractive to users, but also to turn a profit.

The proposals are not law yet but are contained within an unpublished report from the Article 29 Data Protection working party obtained by the FT. Article 29 is made up of European data protection regulators and other experts - the UK is represented by Information Commissioner Richard Thomas. The group has previously clashed with Google over the anonymising of IP addresses.

The group is also concerned at how corporate marketeers are using social networking sites to sell their wares. They should also face stronger regulation, the group believes. The stronger rules could even apply to people with thousands of acquaintances or contacts on such sites

Facebook has already got in trouble with its users over how their data is handled. Much of the problem is transparency - how much data does the company hand over to third party developers and what do they do with it? ®